Material Information

2021-01-13

YFY Inc. announced on behalf of YFY Packaging Inc. and YFY Development Corp., the Board resolution for division spin-off and held a press conference

1.Date of occurrence of the event:2021/01/13
2.Company name:YFY Packaging Inc. and YFY Development Corp.
3.Relationship to the Company (please enter ”head office” or
”subsidiaries”):subsidiaries
4.Reciprocal shareholding ratios:100% owned subsidiaries by YFY Inc.
5.Cause of occurrence:
YFY Inc. announced on behalf of YFY Packaging Inc. and YFY Development
Corp., the Board resolution for the capital reduction due to division
spin-off and held a press conference.
6.Countermeasures:None.
7.Any other matters that need to be specified:
The following is the press release:
YFY Inc. (1907.TW) and its 100% owned subsidiaries, YFY Packaging Inc.
and YFY Development Corp., held their respective board meetings today
(1/13) and resolved to approve YFY Packaging Inc.’s ”Division Spin-off
Capital Reduction Proposal” and YFY Development Corp.'s ”Division
Acquisition Capital Increase Proposal”. YFY Packaging Inc. will divest
the Asset Management Division of the Central District to YFY Development
Corp. YFY Development Corp. will issue new shares to YFY Inc. as
consideration for the transfer of the division, with the proposed split
date set for January 18, 2021.

The businesses of YFY Packaging Inc. focus on industrial paper production,
paper containers service and the development of ESG circular economy.
Currently, YFY Packaging Inc. has two industrial paper plants, namely
Xinwu and Chenggong plant, and five paper containers production plants
in Taiwan. The Chenggong plant is unable to fully implement YFY's circular
economy concept due to the decreasing efficiency of its existing equipment
over the years and the site constraints; considering the overall operation
efficiency, YFY Packaging Inc. has planned to expand its production capacity
at the Xinwu plant, which was completed and commenced operation in 2017 to
fully implement the ESG circular economy concept. After the phasing out of
the existing paper production facilities, the Chenggong plant will be
converted to processing functions, which is no longer the main business of
YFY Packaging Inc..

The estimated amount of net assets to be transferred to YFY Development
Corp. is NTD 771,082 thousand. An independent expert reasonable opinion
report has been issued by a certified public accountant. The estimated
capital reduction for YFY Packaging Inc. is NT$771,082 thousand. Based
on the estimated net value per share of YFY Development Corp. at the end
of 2020, YFY Development Corp. plans to issue approximately 40,797,989
shares to YFY Inc., as the consideration for the transfer of the
division. The spin-off plan is an internal business adjustment of YFY
Inc. and does not affect shareholders' equity. After this adjustment,
the subsidiaries of YFY Inc. will be specialized on its major business
operation and generate reasonable profits for shareholders and takes
the corporate social responsibility.